Massachusetts, with health care law already in place, might be helped by federal health care bill

Associated Press file photoMassachusetts had its historic health care reform bill signing four years ago: then-Gov. Mitt Romney, right, shakes hands with then-state Health and Human Services Secretary Timothy Murphy after signing into law at Faneuil Hall in Boston the landmark bill designed to guarantee that virtually all Massachusetts residents have health insurance. The late Sen. Edward Kennedy, D-Mass., is at center, and former Massachusetts House Speaker Salvatore DiMasi is at right.

BOSTON - The new federal health care bill will have some important effects on Massachusetts including cuts in reimbursement to hospitals, more federal dollars for state government, more prescription drug coverage for the elderly and tax credits for small businesses to help with coverage of employees.

The federal bill, passed by 219-212 in the U.S. House of Representatives on Sunday, is modeled after the state’s 2006 health care law.

Dr. JudyAnn Bigby, secretary of health and human services in Massachusetts, said at least three aspects of the federal bill will help Massachusetts.

First, Bigby said, the state will receive a $2 billion increase in reimbursements for Medicaid, a federal-state program that pays for health care for low-income people and the disabled. The increases, which will help the state, physicians and insurance companies, will come between January 2014 and December 2020, she said.

The federal bill is designed to reimburse states that insure more low-income people. Already, about 1.3 million people in the state receive MassHealth, the state’s Medicaid program.

Second, Bigby added, more people will be eligible for subsidies to help pay for insurance.

Third, Bigby said, the bill will eliminate a gap in coverage for prescription drugs under Medicare.

“The more federal support we get, the better for the state,” Bigby said.

James T. Kirkpatrick, a vice president with the Massachusetts Hospital Association, said reimbursements for Medicaid and Medicare will drop by $155 billion over 10 years to all hospitals in the nation. The cuts are intended to control rising costs of health care.

Medicare is the federal health insurance program for people 65 and older and the disabled.

Kirkpatrick said he did not know how much hospitals in Massachusetts would be cut under that $155 billion reduction.

“This is going to be a significant burden for hospitals to share,” Kirkpatrick said.

Despite the cuts, he said, the federal bill will be good for hospitals, partly because hospitals in Massachusetts will no longer be the exception in having to comply with a law aimed at universal coverage.

Physicians disagreed on the bill.

In a conference call, Dr. Nikhil Wagle, an oncologist from Boston, and Dr. Vivek Murthy, an internist from Boston, praised the bill, calling it a victory for doctors and their patients.

“All of us know we are in crisis and our health system is broken,” said Wagle, co-founder of a group called Doctors for America

He said the bill contains provisions that mean Medicare recipients, starting in January of 2011, will no longer be charged co-payments and deductibles for preventative services such as tests that screen for colon and breast cancer.

The extra payments have been a large barrier for some people seeking such care, he said.

But Dr. David U. Himmelstein, a primary care physician in Cambridge and member of Physicians for a National Health Program, said the federal bill will have relatively little effect in Massachusetts. The federal bill is like giving “an aspirin tablet for cancer,” Himmelstein said.

“It just further strengthens the private insurance companies ... in the form of subsidies and doesn’t do much of anything to rein them in,” he added.

Himmelstein said the federal bill takes about the same approach as the state’s 2006 law.

The 2006 law has insured an additional 408,000 people in Massachusetts between June 2006 and June 2009. About 97 percent of people in Massachusetts have health insurance, according to the state.

Himmelstein said he supports making the federal government “a single payer” for health care and covering everyone.

Lindsey M. Tucker, policy manager for Health Care for All, an advocacy group in Boston, said that about 75,000 additional Massachusetts residents will be eligible for subsidies to help pay for health insurance because the federal bill expands the number of people who qualify for government subsidies.

Under the 2006 law, subsidies are available for single people who earn as much as $33,000 a year and a family of four earning $66,000. Under the federal law, tax credits will be available for single earners up to $43,000 and a family of four making up to $88,000.

The federal law also has a new tax credit for businesses with 25 or fewer employees and average wages less than $50,000 a year, Tucker said. Businesses meeting certain criteria this year will qualify for a credit worth up to 35 percent of their costs of employees’ premiums. By 2014, the credit would be up to 50 percent of an employer’s share of health costs, she said.

The bill also shuts a gap in coverage for Medicare prescription drug insurance, a gap called a donut hole that affects about 81,000 elderly in Massachusetts. Currently, Medicare pays for 75 percent of the first $2,700 of prescriptions after a deductible. Coverage ends at $2,700 and doesn’t start again until prescription costs reach about $6,100. That leaves a gap of about $3,500 that many elderly say they can’t afford.

The law provides $250 rebate to Medicare recipients who are hit by the donut hole this year, a discount on brand-name drugs in the donut hole starting in 2011 and completely closes the gap by 2020, according to an analysis by a project of the Democratic National Committee.